How To Prevent Catastrophic Decision Making (3 min read)

How many times do you hear of a work initiative, company plan or government project that fails and you think it was obvious that was going to happen? Think government projects to upgrade IT systems or building new transport links or think company plans to go digital or break silos.

Human biases lead to failure

What is it that makes people come together and make such terrible decisions? It turns out that humans have several biases that tends to lead to this including:

Being over-optimistic on their own projects

Struggling to think realistically about the long-term

Having blindspots on downside risks

Thinking there is a consensus on the course of action because no-one has spoken up.

Sound familiar? Well, there is a remedy to this problematic way of making decisions, it’s called the pre-mortem.

A time shifted post-mortem

This idea was first coined by Gary Klein in the Harvard Business Review in 2007 and later Nobel winning Danial Kahneman deemed it as the best way for teams to make decisions. As the name suggests, it is connected to a post-mortem. In medicine, a post-mortem is conducted after the death of a patient to determine the cause of death and learn from any mistakes. A pre-mortem is done before a project starts, but with the assumption that it will fail. It’s a form of prospective hindsight.

For example, my team is about to start a project to launch a new website. With a pre-mortem, I would tell the team we have time travelled to the next year and the website has been a terrible failure. Now it is the job of everyone in the team to come up with detailed thoughts on what lead to the disaster.

Shatter the biases

The beauty of this approach is that overcomes the many shortcomings I mentioned earlier. The optimism bias is removed as we talking about the failed outcome. The difficulty of thinking long-term is resolved by narrowing the scenario down to one and asking for a detailed story of what led to it. The blindspots are filled as all we are focusing on are downside risks and the illusion of consensus is shattered as everyone has to be “non-consensus”.

We can apply this to distinct projects, to investment ideas or even to softer issues like team dynamics (you have team changes, so pre-mortem a team bust-up). For a more practical description of how to conduct a pre-mortem, there are a number of good templates online (like this)